Why Singapore's Guest Worker Scheme Works
by Travis Pantin
Wed, 19 Dec 2007 at 11:46 AM
At Marginal Revolution, an economics professor at George Mason University, Tyler Cowen, comments on Singapore's "guest worker" immigration policy, which has raised to 42.6% the percentage of the country's foreign-born population.
The policy has been an enormous economic success, but seems to be working only because Singaporeans are not squeamish about extreme segregation between immigrants and natives, he writes.
According to the director of Cato Institute's Center for Trade Policy Studies, Daniel Griswold, many Singaporeans see themselves as nationally and ethnically distinct from the majority of the visiting unskilled foreign laborers. The fear that laborers' culture will dilute their own is what motivates Singaporeans to separate the two groups.
Mr. Cowen describes himself as "generally pro-immigration," but he notes that Singapore's example "is a good place to start for thinking through possible conflicts between immigration and liberalism."
Energy deregulation and the environment
Deregulating the electricity industry may be better for the environment than not doing so, a blogger at Knowledge Problem, Lynne Kiesling, writes.
"I firmly believe that retail choice in electricity has instrumental value in and of itself: choice qua choice is a good thing and should be an important policy goal in electricity restructuring, independent of utilitarian evaluations of the outcomes of free choice," Ms. Kiesling writes.
Allowing consumers to choose their electricity provider encourages the providers to bring different products to market. "Product differentiation … benefits both consumers and producers (and thus creates surplus, or welfare, value) in all cases except for some very special conditions," she writes.
In all of the states that have abandoned the regulated monopoly model, "one of the first ways that entrants join the market is with green power products." Although green power has been a niche product until now, it still generally captures between 2% and 4% of the market in absence of other policies such as subsidies. When demand for green power grows, a deregulated industry is better able to meet that demand.
Modeling the supply and demand of housing
Recall that lesson from Econ 101 about how a demand curve is calculated? If not, the anonymous blogger at Accrued Interest provides an illustrative example of how it's done.
The blogger lays out, with plenty of graphs, how he went about trying to determine the fundamentally correct price for homes. He started off by modeling the demand curve, whose shape is determined by three inputs: the price of other related goods (such as rental housing), income, and tastes and preferences.
He then did his best to model the supply curve for homes. Among the considerations that go into shaping the supply curve: "New supply from builders is plummeting, down about 1 million units since 2005. All indications are that what is being built is mostly finishing developments already in progress, so we will probably see the housing starts keep falling, or at least stick where they are."
In the end, given the available information — or lack of it — the Accrued Interest blogger found it difficult to come up with any hard and fast numbers regarding home pries.
"I was hoping for something more definitive, but I'm left with only directions. I know that demand is going to fall considerably. Bad for prices. Supply is also going to fall a good deal. Good for prices. My sense is that there will be enough foreclosures to keep supply close to 2006 levels, where as tighter credit will cause a plunge in demand," he writes.
However, he admits that if someone held a gun to his head and forced him to pick a number, he would predict a real decline in demand of about 10% to 20% happening in 18 to 24 months.
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